thesis, I told you in the beginning I was only going to suggest an interrogation mark. I am a good deal like the old New York farmer who entered his nag in the Saratoga races in competition with the Kentucky thoroughbreds. In talking about the mare, after the races, his wife said, "Did the mare win?" Si said "No," in a disgusted sort of a way, and she said, "Well, what was the trouble? Why didn't she win?" "Well," he said, "The course was too long and the time was too short."

So, I think the course is too long and the time is too short to go thoroughly into a question that I said was as deep as human nature and as wide as human society. I want, therefore, simply to pass most inadequately to one suggestion as to the remedy. Do not understand for one minute that I am saying we should turn the hands back on the dial of human progress, and please do not understand for one moment that I am depreciating mechanical invention.

On the contrary, I recognize, as everyone who has ever studied history must recognize, that every advance of man, from the cave dweller up to the present time, has resulted from mechanical invention. You know, scientists have divided human life into these great periods-first, the lower period of savagery, beginning when man was little more than the inhabitant of a tree, like an ape; gradually, he learned to take a piece of flint and fashion it into a sharp edge to defend himself, and to forage for food. Then, he passed into the middle stage of savagery, and then he made the greatest chemical discovery that has ever been made from that time to this. He learned how to kindle a fire, and he was the master of climate. Then, he went into another more advanced state of savagery, learning to take the entrails of an animal and attach it to a piece of flexible wood, and he had a bow and arrow with which he commenced to enlarge the sphere of his

power.

Then, he graduated into the lower stage of what is called barbarism, and the first thing he did there was to learn to make pottery out of the clay of the soil. He then went into the middle stage of barbarism, when he domesticated cattle and horses and cultivated grain. From there, he went into the higher stage of barbarism when he first learned to use copper and iron ore and how to fashion instruments with it.

Then, he commenced in the lower stage of civilization, as I have described it, eight thousand years ago, when he developed nearly all the facilities of our ordinary everyday life.

Then, he went into the middle stage of civilization, when, with gunpowder, he annihilated the physically mighty; when, by the printing press, he diffused his thought by the facility of printing; when, through the mariner's compass, he was able to push the bow of his boat out into the unknown deep and thus discover America.

Finally, there came that development of steam vapor and all those discoveries affiliated with it. This was the highest stage of civilization that man has ever known. And then the great wheel of progress was whirled off its bearings in 1914 by the centrifugal influence of too much speed. When man pulled himself out of the wreck that has cost three hundred billions of destroyed capital and thirty millions of lives, and saw the wreckage of civilization, he then suddenly said to himself that, after all, perhaps he was like Alice in Wonderland, when the Red Queen took her by the hand and led her through the land of dreams at a terrific rate of speed, and after they had wandered long and far, when they stopped Alice found they were exactly where they started from, and she asked the Red Queen how that could be so. Alice said, you remember, "Why in my country, when I am awake, when people go so fast they get somewhere,” and the Red Queen replied, "It is not so in this world of dreams. You have to go twice as fast in order to stay where you are."

At all events, when man pulled himself out of the most gigantic catastrophe that the world has ever known, if we deal in superlatives, in this marvelous age through which we are now passing, when he picked himself out of the wreckage of civilization he suddenly realized that while facilitation and acceleration were wonderful, while it is fine to make things more easily and to do things more quickly, yet, after all, there is something infinitely above all that, and that is the human soul; that the dynamo of the human soul is greater than any dynamo that the most marvelous engineer or the most wonderful water power has ever developed.

What is the remedy? I have none, I am frank to say. Do not say it is silly for me to talk so long and then not have a remedy, because if I should go to one of you electrical experts and say, "Here, I have a perpetual motion machine," and he at once demonstrates its mechanical inefficiency, could I then say, "Well, who are you to criticize my perpetual motion machine unless you can make one yourself?"

We will never pull ourselves out of the slough of despond in which the world now finds itself, for

it is a very sick world, as all experts agree, and as "Rare Ben" Franklin would be the first to recognize, if he came out of his cask of Madeira, until and unless we can change the psychology of the average man. We must make ourselves rise above the machine. We must change our whole outlook. We must teach the average man to work in a different spirit than he does at this hour. In other words, we must teach him to be the master of the machine which he has developed and on which he has worked.

To do that may not be easy, but, as I said before, man's inextinguishable impulse to live, as it confronts the widespread insubordination of all classes, will yet work out the great lesson that the saving element of life is work.

Do you know what the word "America" means? Of course, you will say, "Why the word comes from the Italian navigator, Amerigo Vespucci, first applied by a great geographer in St. Die in eastern France, who wanted to make a map of the globe and wanted to name the great newly discovered continent."

Amerigo was an Italian corruption of an old Gothic name, Amalric. Amalric was gradually changed through generation and generation until in

Italy it was softened into Amerigo, and into. America.

What does Amalric mean? It consists of two words, "Amal," which is the Gothic word for work, and "ric," which is the stem Gothic word for "conquer"-all-conquering work. That is what America means, "all-conquering work." It is work that conquers, work that removes obstructions, work that has made the conquests of this continent from the Atlantic to the Pacific. It is work that has made us from a little nation once as distant from civilization as is now the Congo, to the greatest nation in all the world, today a nation of one hundred and ten millions of people.

We must teach the coming generations the meaning and the inspiration of the word "America." We must teach them that the most wonderful thing in all the world is work. In teaching them we must not deprive them in any way of their right to work, nor in any way deprive them of the fruits of their is that which America means, and which makes of work. We must teach them that the greatest thing America the most potent inspiration in all the world, the "work that conquers."

(At the conclusion of Mr. Beck's address moving pictures were shown, after which the session adjourned.)

to order at 2:15 P.M.

THE CHAIRMAN: Gentlemen, it is a pleasure to welcome the members of the accounting fraternity

to this meeting and to see that so many are present. The first business of the session is the Address of the Chairman and, with your permission, I will now read the report of the Accounting Section's activities:

The work of the Section began for the current year on July 8, 1920, when the Executive Committee met at headquarters in New York. Taking up the list of Committees previously organized, twelve in number, it was directed that two of these, one on Uniform Classification of Accounts and Relations with Other Associations, and that on Form of Annual Reports to Commissions, be consolidated; that three be discontinued, namely, Insurance Committee (which became a National Committee), Merchandise Accounting Committee, and Motor Vehicle Records Committee, both of the latter having fulfilled their functions, in the judgment of the Executive Committee; and that the remaining seven be continued. This made the Committees to be active as follows:

Classification of Accounts, Form of Annual Reports, and Relations with Other Associations; Accounting Education; Purchasing and Store Room Accounting; Federal Income Tax Procedure; Bonus Systems; Customers' Records and Billing Methods; Credits and Collections; Accounting Service to Member Companies and the Monthly Bulletin; to which were added by the Executive Committee when it met again on February 24, 1921, Committee on Investment Budget Control and Committee on Security Holders' Records, ten in all.

Presentation of subjects covered by these Committees will be made in the sessions, through printed reports, statements of progress, and topics for discussion, excepting the Committee on Accounting Services, referred to later.

Organization under the Geographic Division plan of the revised Constitution has progressed throughout the year, a fairly complete tie-in between the Divisional Accounting Sections and the National Accounting Section now being possible. This relationship will permit much closer contact between accounting members throughout the national field, through State Associations, where formed, Geographic Divisions, and so on into the National Section; consequently there is also created a wider field for selection of Committee personnel, greatly facilitating the labors of the National Section Chairman in organizing the work from year to year.

Budget of the Section

It is required by the Constitution that a budget for the administrative year, beginning July first, be submitted to the National Executive Committee not later than August 15th thereafter, for approval.

The

From year to year in these sessions reports of progress in the matter of standardization of classifications of accounts prescribed by State Commissions have been made by your Committee, since the Association adopted this Section's compilation of a Standard Classification of Accounts in 1914. Committee, continuing its efforts to that end, has made an interesting report this year, and, without seeking to anticipate too much of the report, a brief review of the events leading up to the present status may be of interest at this time.

Following the adoption at the 1914 Convention of the Standard Classification of Accounts of this Association, under the chairmanship of Mr. H. M. Edwards, the Committee made, in 1915, '16, '17 and '18, Mr. Wm. Schmidt then being chairman, a comparison of the titles and text of each account, with those in the classifications adopted by Commissions of the various States, a work involving preparation of some 1,600 pages of typewritten matter, with In addition, suggested wording for each account.

a questionnaire was prepared and sent to member companies, requesting criticisms and suggestions, which brought out a quantity of interesting information. Representatives of the Committee later called upon, and described the work done in making the comparison of titles and text to, Mr. James O. Carr, of the New York Second District Commission, at Albany, then Chairman of the Committee on Statistics and Accounts, National Association of Railway and Utilities Commissioners. Mr. Carr was greatly interested, and shortly after appointed a subcommittee to make a study of the comparisons and to confer with our Committee regarding standardization. Mr. Carr soon after resigned, and the subject was dormant during the war period. In 1919, on the resumption of activities, Mr. C. E. Schreiber, of the Wisconsin Commission, became Chairman of the Committee in Mr. Carr's place,

but before much progress was made, Mr. Schreiber also resigned, not without, however, giving interested consideration to the subject, as had Mr. Carr.

Following Mr. Schreiber's resignation, Mr. O. O. Calderhead, of the Washington State Commission, was made Chairman of the Committee on Statistics and Accounts.

Several conferences between your Committee and a similar Committee of the American Gas Association were held, 1919 and 1920, which resulted in the harmonization of the Classifications proposed by this Association and the Gas Association, and in April, 1920, the Joint Committee of the Electric and Gas Associations met in conference with Mr. Calderhead's Committee in Chicago. The following were present:

Harry Boggs, Indiana Public Service Commission; George L. Mathews, Railroad Commission of Wisconsin;

H. C. Hasbrouck, Public Service Commission, 2nd District, New York:

W. M. Hammond, Public Utilities Commission, Illinois;

O. O. Calderhead, Public Service Commission, Washington;

R. A. Carter, Consolidated Gas Company, New York;

H. M. Brundage, Consolidated Gas Company, New York;

W. J. Meyers, United Electric Light and Power Company;

Alfred P. Post, American Gas Company, Philadelphia;

H. M. Edwards, The New York Edison Company, New York;

Wm. Schmidt, Jr., Consolidated Gas, Electric Light and Power Company, Baltimore;

R. W. Symes, The Detroit Edison Company, Detroit;

H. E. Addenbrooke, Commonwealth Edison Company, Chicago;

Fred W. Herbert, National Electric Light Associa

tion.

It was agreed that before discussing details certain general principles should be first considered, and agreement was reached:

1. That no useful purpose being served by dividing credits for withdrawal of the same class of property between two accounts, according as the installation was made before or after a given date, the representatives of the National Association of Commissioners would recommend the abandonment of such division of credits, and that all credits for withdrawals of items of any given class of property be recorded in the account appropriate to that class of property.

2. That subject to Commission control of the use of the suspense account "Abandoned Property," in cases where a reserve is not adequate to cover withdrawals actually made, the two accounts proposed by the Electric and Gas Associations under the titles "Renewal and Retirement Expense" and "Renewal and Retirement Reserve" were substantially satisfac

tory, and made unnecessary any further accounting for so-called "depreciation." (Subsequently, at the suggestion of Mr. Boggs, it was agreed to omit "renewal" in these titles, making them "Retirement Expense" and "Retirement Reserve," as they now appear.)

3. That it would be recommended that titles for the balance sheet be adopted substantially as they now appear in the Classification.

Before the conference ended, the Chairman, Mr. Calderhead, appointed Messrs. Hasbrouck, Mathews and Hammond a subcommittee to consider the details of the classifications proposed by this and the Gas Association, and to report at the earliest possible date. It need hardly be pointed out that this conference marked a stage of very distinct progress with respect to accounting for the long-discussed topic of so-called "depreciation."

Fol

At the Pasadena Convention of this Association, May, 1920, following the report of Mr. Wm. Schmidt, Chairman of the Committee on Uniform Classification of Accounts, the Accounting Section was authorized to adopt a mutually satisfactory classification, subject only to final ratification by the Executive Committee of this Association. lowing the Convention, suggestions were received from various sources in the Association, the Pacific Coast Section submitting a complete classification embodying in their judgment the requirements covering conditions in their territory. The suggestions were given most careful consideration in subsequent conferences, and adopted wherever practicable.

In the meantime Mr. W. J. Meyers, United Electric Light and Power Company, New York, became Chairman of your Committee, succeeding Mr. Schmidt, who had given so much time and effort to the furtherance of the work. Under Mr. Meyers the Committee's studies resulted in the completion. of the revised classification,

In September, 1920, at Chicago, Mr. Hasbrouck reported the conclusions of his Committee to Mr. Calderhead, the joint Electric and Gas Committee being present at the conference. It was evident that great progress toward uniformity had been made, although certain regulatory matter had been introduced which your Committee deemed inappropriate in an accounting classification, and reserved approval thereon, as well as on the text of Accounts for "Retirement Expense" and "Retirement Reserve," pending final action by the Public Policy Committee; these exceptions were again presented, and approval reserved, when in November, 1920, the Calderhead Committee reported its recommendations to the Association of Railway and Utilities Commissioners at their Convention, in Washington, D. C. The Convention ordered that the report be received and printed, recommending that member Commissions give careful consideration to the adoption of the classification unless in conflict with local statutes and conditions. The joint Electric and Gas Committee attended the convention by invitation of Mr. Calderhead's Committee.

The classification now before you embodies the recommendations of your Committee and the Accounting Section; it has received the approval of the Public Policy and Executive Committees of this Association, after the elimination of the regulatory provisions above referred to, and the incorporation of certain modifications by the Public Policy Committee which were deemed essential; it represents in the judgment of the Committee a complete and comprehensive system of accounts that every electric light and power company may standardize on, whether the company be small or large. It is the fruit of earnest and unremitting labor on the part of your Committee over a period of several years, and reflects great credit upon the several Chairmen and members of the Committee, who have completed a long and difficult task, intelligently and vigorously prosecuted, and successfully accomplished as to its technical content.

There yet remains the work of advocating its adoption by State Commissions, in which your Committee, and Section, and the staff of the Association will join forces with member companies. Mr. Fred W. Herbert, of National headquarters, has rendered valuable service in many ways during the compilation of the Classification, and recently has been in communication with representatives of member companies and the State Commission in Massachusetts, where a classification largely identical with ours will be effective on and after July 1st next. This illustrates the influence already of the efforts toward standardization exerted by utility and Commission representatives upon the subject of Commission regulation, and we may hope for similar results in other States. And, before passing to other matters on our program, I believe it appropriate to here pay a tribute to the gentlemen above mentioned who represented the State Commissions in the conference looking to the standardization of classifications, and I think the members of our Committee will bear me out in stating that they evinced a sincere desire to approach the subject in a spirit of accommodation and equitable adjustment.

Recommendations of Committees
Classification of Accounts, etc.

It is recommended that the Accounting Sections of Geographic Divisions exert all possible influence in their several fields in the direction of adoption by State Commissions of the Classification now presented here, which, with the exception of the regulatory provisions and the modifications made as above referred to, is identical with that prepared by the Commissioners' Association.

Accounting Education

Attention is directed to the recommendation of this Committee as to continuing from one year to another the personnel, as far as possible, making such changes as may be necessary due to vacancies as promptly as may be. This is suggested because the educational periods do not coincide with the administrative year, which ends at a time when the Educational work should be actively under way

namely, July 1st, or rather, June 30th. It is further suggested that Chairmen of Geographic Division Committees on this subject tie-in closely with the work, thus promoting the dissemination of the Courses.

Purchasing and Store Room Accounting

The recommendations of this Committee that determination of various points not fully worked out in this year's report, notwithstanding the extensive ground covered, be referred to the incoming Committee, should be continued, are referred for careful consideration. These points refer to (1) retaining invoices in Purchasing Department; (2) duplicate invoices; (3) code numbers on stock; (4) salvage work; (5) routine of handling obsolete and slowmoving materials; (6) adaptation of Hollerith system to storehouse work; (7) some phases of inventory procedure not included in 1920 report. The reference to reducing and limiting investment in materials and supplies, in view of changed financial conditions, also merits attention.

Federal Income Tax Procedure

In view of the existence of the National Committee on Uniformity of Regulatory Laws and Public Utility Taxation, the recommendation of the Committee that the scope of its activities be clearly defined and established, with relation to the National Committee, to avoid conflict and duplication of effort, should have due consideration. Bonus Systems

The suggestion concluding the Committee's report that the subjects developed by their studies, including employe stock ownership, employe committees, etc., may be more properly handled by a National Committee having to do with employe relations, is a matter committed to the consideration of the Executive Committee in the coming year.

Customers' Records and Billing Methods

The suggestion made by this Committee that a close study of methods of control to insure that all meters are either included in the billing process or are accounted for in the storeroom, may be a subject for the consideration of the Committee, should it continue to function in the coming year. Accounting Service to Member Companies and the Monthly Bulletin Owing to failure to

secure a Chairman to direct it, the Committee has not been active. Should it continue, it may, in co-operation with the Committee on Classification of Accounts, be made the medium for disseminating information regarding interpretations of the new Classification of Accounts. It is recommended for consideration that when such information may appear to warrant, it be collected in pamphlet form for distribution to member companies.

Credits and Collections

The subjects to be presented by the Committeee for discussion clearly indicate matters of very important bearing upon the realization of revenue;